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Long term capital gain calculation on under-construction land

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Yesh G

24 Points Posted on 28 July 2023

My Scenario is:

We have land purchased in 2012 in an under-construction township for 22 L.
Paid installments as per the asks from builder till 2014. Till 2014 about 15L was in totality paid.
Although, further requests for installments didn't come because builder couldn't simply do land acquisition.
After waiting for many years, I had sold it in 2022 for exactly same amount to someone local there. Basically, land acquisition never happened till that time.

My questions are:

This is a case of long term capital gain?
If Yes, how do we calculate long term capital gain for this property? Only allotment happened in 2012 but Possession / Registration never happened on it.

Replies (4)

Quick Summary

This discussion explores the complexities of calculating long-term capital gains tax on land purchased in an under-construction township. The user acquired land in 2012, paid a significant portion, but never received possession or registration due to the builder's issues. The land was later sold in 2022 for the original purchase price. Key questions revolve around whether this qualifies as a long-term capital gain and how to accurately calculate it, considering the lack of formal possession and title transfer.

sabyasachi mukherjee

Profession

19978 Points Posted on 29 July 2023

For purchase of land you cannot get benefit.

Yesh G

24 Points Posted on 29 July 2023

Check the whole text, it is sold in 2022 as well.

sabyasachi mukherjee

Profession

19978 Points Posted on 02 August 2023

So what happened pls read relevant section and get back to me. I am quite aware of the relevant section. You cannot purchase land like that. THE TITLE OF LAND HAS NOT PASSED TO YOU.

Aashok Kumar Sharma

Finance/Compliance Consultant

75870 Points Posted on 08 November 2026

Plot in an under-construction township, bought in instalments from 2012:

• Holding period: from the date of allotment or agreement (2012). Long-term.

• Cost: total instalments paid (Rs 22 lakh) plus stamp duty and registration. If opting for indexation (resident individual, acquired before 23 July 2024, sale after 23 July 2024), index each instalment from its year of payment.

• Tax: the lower of 12.5% on (sale minus actual cost) and 20% on (sale minus indexed cost).

• Exemptions: Sec 54F (new house), 54EC (bonds within 6 months).